The government’s response to the financial crisis was dramatic, enormous, and unprecedented, and nothing about it has been overseen by the courts. In our federal system, the courts are supposed to put the policies of presidents and congresses to the test of judicial review, to evaluate decisions by the executive to sanction individuals for wrongdoing, and to resolve disputes between private parties. But during and after the financial crisis, there has been almost none of that sort of judicial review of government; few sanctions, especially criminal ones, on the private sector for conduct during the crisis for the courts to scrutinize; and a private dispute process that, while increasingly active, has resulted in settlements, rather than trials or verdicts. This Article tells the story of the marginal role of courts in the financial crisis, evaluates the costs of that role, and provides suggestions to ensure a real, if not all-encompassing, judicial role during the next economic emergency.
THIS Article argues that the complex doctrine of judicial review of administrative action—containing no less than six separate tests depending on the sort of agency action to be reviewed—both descriptively is and normatively should be simplified into a “reasonable agency” standard. Courts, following step two of the Chevron doctrine, have started to sneak a reasonableness standard into their review in lieu of making the difficult distinctions required by current doctrine. Scholars evaluating the difference among the various doctrinal tests have started to note the increasing similarity among the tests, at least as applied by the courts. Empirical research, to which this Article contributes an additional study, suggests that regardless of the standard of review, courts affirm agencies’ actions slightly more than two thirds of the time; the variance of the validation rates of agency action, regardless of the standard of review, is small. A reasonable agency standard would simplify and clarify administrative law, better describe what courts actually do when confronted with agency action, and better explain the judicial role in the administrative state.